Monday, July 26, 2010

Jonathan Bernstein Needs to Get Out More

Here’s Jonathan Bernstein, a smart and accomplished political scientist, confessing that he’s at a loss to explain “perhaps the biggest mystery of the last couple years: the stimulus that didn't grow” (my emphasis):

“Had I been blogging back in spring 2009, I would have said that it didn't really matter if centrist Senators trimmed a few hundred billion dollars from the stimulus package, because it could only be spent over time anyway, and that an extra $200 billion or whatever would certainly be passed well before it would have been spent had it been part of the original bill.

“In that, I would have been dead wrong. And if my job here is to explain things like this, I can't; I find it completely mysterious that Congress has not, at the very least, poured money to the states to prevent layoffs. Because I don't understand it, I'm not even sure whether to place the blame with the White House, with Senate Democrats, with House Democrats...I don't know."

Bernstein is very adept at explaining legislative outcomes in terms of structural features of our political system, but he doesn’t have a structural explanation for this one. That’s understandable in light of how robust a phenomenon popular opposition to more public borrowing in order to increase aggregate demand currently is across political systems. That was demonstrated by all the heads of state rolling their eyes at the last G20 summit in Toronto when Obama’s urged them to keep their foot to the floor on the Keynesian throttle.

Still, I'm perplexed by Bernstein's perplexity. I’m no political tactician, but I think I can spot a hard political sell when I hear one.

Suppose it’s your job to come up with a political pitch to persuade the crucial constituency of non-unionized private sector employees that another round of stimulus consisting mostly in subsidies to state governments is a good idea. It’s your job, in other words, to justify putting publicly borrowed dollars in the pockets of public sector employees who already make more money and enjoy more job security than their counterparts in the private sector and can look forward to a retirement lavishly funded by defined-benefit pensions when private sector employees are lucky to have self-financed 401Ks. Your pitch will have to be that private sector employees' best hope of landing or keeping a job is for the government to enable comparably skilled people working fewer hours than they do to buy stuff that most private sector employees can’t afford.

I don’t doubt that a story to this effect is economically coherent, or even that it may well point to the best way out of our current economic predicament. But is it really mysterious why it’s a hard sell?